business

Bob Walker's 12,000-square-foot dream house turned into a bit of a nightmare when he opened his first heating bill and saw the number: $1,675!

His response was predictable for the man who invented the Sleep Number bed and founded Select Comfort Corp., the $700 million Wall Street favorite that manufactures it.

Walker, 63, spent three years researching alternative fuels, designing a remarkably efficient corn-burning stove and raising $22 million to bankroll a Rogers-based start-up called Bixby Energy Systems.

The results so far: Sales are on track to reach $10 million in fiscal 2006 ending May 31, the stove's second year on the market. And with orders coming in so fast that Walker has been forced to find a production plant five times larger, he figures sales in fiscal 2007 will reach $40 million.

And that's just for starters. The way Walker sees it, the corn-burning stove is but a baby step on the way to his ultimate goal: an integrated home-heating system that includes a furnace capable of burning biomass fuel pellets manufactured out of crop, animal and human waste and delivered to customers, all by Bixby or a licensee.

Walker has spent several years developing a proprietary process for producing his fuel pellets and already has acquired the system he figures can be adapted to deliver them. It's called Step-Saver, a Redwood Falls company that has a patented system for pumping salt in bulk through the foundation of a client's home directly into a water softener's storage tank.

Walker figures if delivery can be done with salt, a similar system can be used to deliver pellets to a furnace.

"I see us as the Standard Oil of biomass energy," Walker said. "I think this could be a billion-dollar business."

Are we talking pipe dreams here? Not according to a gathering of investment bankers and venture capitalists with a focus on alternative fuels; Bixby was one of 75 companies invited a year ago to present business plans. The upshot: The Minnesota company walked away with one of five "Most Promising Company" awards.

The success of Bixby's corn stove, the 50,000-BTU MaxFire, offers more credibility.

"Bob Walker is way out in front of any competition we've seen, without question," said Neil Konietzko, a Bixby investor living in suburban Atlanta. He ought to know: He and his son own a Wisconsin dealership that sells alternative-fuel stoves, including Bixby's and its main competitors.

"The vast majority of the stoves out there are much more labor-intensive in terms of starting and maintaining them," Konietzko said.

The MaxFire, which retails for $3,995, holds 106 pounds of corn and heats a 3,000-square-foot area at about 45 percent the cost of heating oil and 55 percent the cost of natural gas, Walker said. It is meant to be used with the fan system of a conventional furnace to circulate heat from the stove.

Three of the MaxFire prototypes have heated Bixby's 17,000-square-foot plant in Rogers, at a cost of $4.50 a day, Walker said. Given demand for the stove, however, he's not sure he can spare any of them for the 91,000-square-foot plant in Brooklyn Park to which Bixby is moving this month.

A possible IPO

The larger facility not only will help him fill unmet MaxFire orders, it also will allow Walker to introduce a smaller "room-heater" version of the corn stove that will sell for between $1,995 and $2,495.

But all this is mere preamble to Walker's business plan. He figures to take Bixby public late this year and raise another $15 million to $20 million to begin assembling what he calls the "Minnesota Model" for a biomass furnace system. Included in the mix:

• Upgrading the MaxFire into a 100,000-BTU furnace system that not only would heat a home, but also convert heat into electricity to furnish much of the home's power.